Xero sales gain 84% as cash on hand falls to $55m

Xero, the cloud-based accounting firm whose shares have soared 150 percent this year, said first-half sales almost doubled as it continued to chase customer growth ahead of profits.

Operating revenue exceeded $30.3 million in the six months ended Sept. 30, from $16.5 million a year earlier, the Wellington-based company said in a statement.

The figures exclude its Xero Personal product, which is being withdrawn in November next year. It contributed $600,000 of sales last year.

Total paying customers rose to 211,300 as at Sept. 30, from the 200,000 level it reached at August 30 and up 89 percent from September last year.

The company is seeking to build its customer base to 1 million, burning cash in the process as it builds scale. Cash on hand fell to $55 million from $69 million at June 30.

The fastest growth in the first half came from Australia, where customers rose 143 percent from a year earlier to 79,100. US/Rest of the World customers rose 141 percent to 16,600 and UK customers rose 99 percent to 30,100. In its largest market of New Zealand, customers rose 49 percent to 85,500.

Xero didn't give figures for earnings.

The shares last traded at $19, compared to $7.60 at the start of the year.

BusinessDesk